New foreign investment in Mexico stalls amid USMCA uncertainty

Mexico’s headline foreign direct investment number looks great on paper. Roughly $35 billion flowed into the country in the first half of 2026, a record. But peel back one layer and the picture gets considerably less flattering: new foreign investment fell 13% year-over-year during the same period, with fresh capital accounting for just 7.8% of the total. The rest? Mostly companies reinvesting profits they’d already earned in Mexico, not new bets on the country’s future. The USMCA problem The core issue traces back to July 1, 2026, when the United States declined to grant the USMCA a 16-year automatic extension. Instead, Washington opted for an annual review process, effectively converting a long-term trade framework into something that feels provisional. The USMCA covers approximately 80% of Mexico’s exports to the US, meaning the agreement’s rules on tariffs and rules of origin touch nearly every major manufacturer operating south of the border. Pedro Casas, CEO of AmCham Mexico, captured the mood bluntly, suggesting that investment may stop altogether if the renegotiation process drags on without clarity. Auto parts manufacturers, one of Mexico’s most important industrial segmen...